Manchester City has spent a net £127m on players since May 2010, despite recording a record loss in its last financial year, new figures show.

The outlay, revealed in the club's latest accounts for the 12 months to the end of last May, will make it harder to comply with strict financial fair play rules being brought in across Europe.

But City reported annual revenues of more than £100m for the first time ever on the back of securing its highest-ever Premier League finish.

Most notably, corporate partnership income jumped 400 per cent to £32.4m, driven by long-term deals being signed with the likes of the Abu Dhabi Tourism Authority and shirt sponsor Etihad Airways.

But the Eastlands club made a pre-tax loss of £121.3m, which was up 31 per cent from the year before.

That was partly due to its £133m wage bill outstripping turnover of £125.1m.

Notes to the accounts lay bare the huge sums spent by City since the year-end on stars like Edin Dzeko, Jerome Boateng, David Silva, Yaya Toure, Alexander Kolarov, Mario Balotelli and James Milner.

The notes state that, despite managing to offload players such as Stephen Ireland and Robinho, 'net expenditure on these transactions including contingent fees was approximately £127.1m.'

The revelation comes as Financial Fair Play Regulations for teams playing in UEFA competitions are set to come into force.

Clubs will be allowed up to £34.7m in losses in the first monitoring period of 2011/12 and 2012/13. They have to work towards breaking even over the next six years or face being banned from continental contests.

The need to curtail City's spending has been acknowledged by chief executive Garry Cook in his directors' report, which states: "As the club continues to assess the level of investment required to compete at the highest level, it does so whilst pro-actively engaging with all relevant stakeholders involved in the evolving debate around how to create greater commercial sustainability within football clubs.

"It is also fair to say that the scale of the club's recent investment in the transfer market is unlikely to be repeated in the near future now that the playing squad is of a sufficient quality and depth to be competitive in both England and Europe.

"This will reduce the impact of player transfers and salary costs on financial performance in the years ahead."

Money brought in through ticket sales also grew 18.6 per cent to £18.2m, thanks to extended runs in cup competitions.

The fact City finished fifth in the Premier League meant television rights income rose by £5.7m to £54m, while matchday hospitality was up by £700,000 to £6.1m.

The club managed to increase retail and merchandise revenue by 60 per cent to £7.9m, in the first year of its Umbro kit supply deal.

Despite growing its revenue significantly, the amount earned by City is still dwarfed by neighbours United, who are on course to rake in £100m from commercial activities alone this financial year.